Economic Scene;Welfare time limits raise the specter of more street dwellers.

By Peter Passell

Published: November 2, 1995

NEWT GINGRICH and Bill Clinton agree: the time for time limits on welfare has come. But what happens when the welfare checks stop? "Not a lot of people have thought about it," says LaDonna Pavetti, a researcher at the Urban Institute.

They will soon have to. A dozen states have already received Federal waivers to set time limits. The others will probably not even have to ask: both the House and Senate welfare bills would drop any requirement to provide monthly stipends. But researchers who watched the states cope in haphazard fashion with rising caseloads in the early 1990's are not sanguine about the consequences.

At best, they say, time limits on cash benefits will force the dependent poor and the bureaucrats who serve them to focus on finding work for the able-bodied. Those who cannot find work on their own will be shunted into public service jobs that teach the value of work and help to break the cycle of dependence.

But it is also possible that welfare will become meaner as well as leaner. Tens of thousands now live on the streets. Perhaps Americans will learn to turn their backs on tens of thousands more.

The idea of time limits was part of what Judy Gueron, president of the nonprofit Manpower Demonstration Research Corporation, calls "the liberal-conservative consensus" that dominated thinking about welfare for much of the last decade. From this perspective, public assistance was a right -- but only as long as those who needed it did their best to get off it.

Society would never abandon the irredeemably dependent. But the notion of a fixed limit on cash grants meshed with the new emphasis on "workfare." Some, it was assumed, would find jobs before the time limit. The rest would earn their welfare checks raking leaves, helping in child-care centers or cleaning storm drains.

The catch, well known to policy specialists if not to taxpayers, is that workfare is very expensive unless a high percentage of chronic welfare recipients find jobs. For even if public service jobs pay little, the cost of providing day care and administering the programs would far exceed the cost of welfare as usual. Indeed, it was fear of the price tag that stood in the way of welfare reform on the workfare model during the Bush and early Clinton years.

But the liberal-conservative consensus is gone, victim to the priorities of the new Republican majority in Congress. If the Republicans have their way, there will be no new money for public service jobs. Indeed, there will be $100 billion less for welfare over the next seven years. What's more, states will be free to spend fixed block grants any way they please.

How they please will almost certainly include time limits: 24 states have already applied for waivers to set limits. And while a few are committed to workfare, the link between time limits and jobs of last resort is fraying and will likely be severed once state legislatures understand that Federal aid is no longer linked to the ambitions of state welfare programs.

Everyone expects deadlines to create "a sense of urgency" among welfare recipients, says David Butler, a policy analyst at the Manpower Demonstration Research Corporation and the co-author of the organization's first study of time-limited welfare. But just how far will a kick in the pants move the welfare system?

The typical user of welfare is off the dole within two years. But the majority of those on welfare at any one time are there to stay: Ms. Pavetti estimates that three-quarters of four million to five million adults currently on welfare will remain dependent for at least five years. And she is skeptical that a large proportion of them can soon be bullied or cajoled into private-sector jobs.

Even if they could, it is far from clear that the bitterly competitive market for unskilled labor would make room for them. Sheila and Sheldon Danziger of the University of Michigan found that just one-third of the nonelderly adults without children forced off Michigan's "general assistance" welfare roles in 1992 snagged full-time jobs within two years. And those were years of falling unemployment. "All bets are off for recessions," Mr. Danziger concludes.

So what happens to the losers? Those who subscribe to the old workfare consensus hope that the prospect of poor families living on the streets will force Americans to face up to the reality that reducing dependence is a time-consuming and expensive business.

But Gary Burtless of the Brookings Institution is skeptical it will come to that. More likely, extreme poverty will be driven underground, as families stripped of welfare grants get by on a combination of temporary work, food stamps, Medicaid, charity and help from relatives.

"We shouldn't kid ourselves that time limits will make most recipients' lives better," he said.